Kwasi Kwarteng has revealed that the government is exploring the rebirth of the Green Investment Bank (GIB).
“There has been a broad discussion within government about how we can create in effect the Green Investment Bank 2.0,” he said, referring to the institution set up under the Coalition to finance low-carbon projects, which was sold off to investment bank Macquarie after the Conservatives regained full control of the government following the 2015 general election.
Kwarteng said: “I fully expect there may well be an announcement in that regard in the not too distant future. The fact is that we are now committed to net zero over the next 30 years.
“The clear need we will have for a huge amount of investment to have any chance of getting there suggests there may be scope for some kind of investment bank.”
He was speaking at the virtual launch of a new report by the UK 100 umbrella group of local authorities, which recommends the establishment of a new Net Zero Development Bank.
Kwarteng said he was “interested” in the report’s proposal, while adding that a new bank should also have a role encouraging consumers to make carbon-cutting investments.
“I suspect some form of national bank like the KFW could facilitate that,” he said, referring to the state-owned German bank that offers low-interest loans to households to help with projects such as energy efficiency upgrades.
The UK 100’s proposed Net Zero Development Bank would have a much greater development role than the UK GIB by supplying pump priming investment for low carbon projects.
It would be a conduit for all government funding to support net-zero investment, replacing the “myriad” BEIS programmes that the report says many councils and local SMEs find “confusing” to access.
The bank would also become a centre of excellence for developing, procuring and delivering net zero project investment and help to scale up investment opportunities to make them more attractive to institutional investors.